#MoneyMonday #Operationhiddentreasure #IRS #Canthide

In an estimated three weeks from now or more specifically October 15, 2022 it will be the deadline for those who have not filed their 2021 tax return or have filed an April 15, 2021 tax exten-sion to file their return. For those who have already filed their return on time, you may think this Money Monday may not contain any information for you, but I suggest you keep reading. While we know that the Internal Revenue Service (IRS) may retain information about an individual, in the age of digital and cryptocurrency what you can hide is impossible.

Hidden Treasure:

In the year 2021, the IRS launched “Operation Hidden Treasure.” As the name suggests, the agency is seeking information taxpayers have not reported on their tax returns. In this case, they are specifically looking for unreported digital or cryptocurrency transactions information. Reportedly, this operation is a joint partnership between the civil division and the criminal division of the IRS.

The Letters:

There are three letters you do not want to receive from the IRS with regards to this operation. They are letters numbered 6173, 6174 or 6174-A. Interestingly enough, the letters contain a heading section – “Why We’re Writing You.”

Below that heading, is this following paragraph: “ We have information that you have or had one or more accounts containing virtual currency, and my not have met your U.S. tax filing and reporting requirements for transactions involving virtual currency, which include crypto and non crypto virtual currencies.” How would you like to receive one of those letters? I won’t tell you the rest of what they letters contain, but I’m sure you can guess, it’s not good news.

Letter 6173:

If you received a letter numbered 6173 from the IRS, it’s pretty much guaranteed that you are in serious trouble with the them, and the best thing you can do for yourself is seek professional help. This would not be the time for a do it yourself project. Here’s why:

By the time this letter is issued, the IRS knows you have crypto currency and or have engaged in virtual currency transactions. Secondly, you have not reported virtual currency information on your tax return. You should know by now, that the IRS, has required taxpayers to answer digital currency questions, and these questions appear conspicuously on the first page of IRS Form 1040. This was done intentionally, as part of Operation Hidden Treasure.

The final point I would share about letter 6173 is that it should not be ignored. As you prepare to file your 2021 tax returns for late filers or even it you have filed on time, but omitted your virtual currency transactions, take steps to correct them before your circumstances change.

That’s What’s UP!

Let’s talk about student financial aid assistance. The Application for Federal Student Aid for the 2023–24 school year should be available on October 1st, 2022 . While you have until June 30, 2024 to submit your application for student aid, states and schools award money on a first-come, first-served basis or impose deadlines earlier than the federal one. Prepare to apply on October 1st. And that’s what’s up!

Whether it’s your job, birthday gift, or some other form and method of reward, we all like to get paid. Not only do we want to receive payment, but we often find ourselves executing payment of our bills and sending money to others in various ways. Technology has changed the transaction world around us significantly during the last decade. No longer are people restricted to checks and direct deposits. Today, Individuals are being compensated in digital currency and other forms and methods of payment. Clients are always asking how you want to get paid or what form of payment you accept in running a business? I didn’t have a preference until recently, but now I do. Let’s see some of the best methods to get paid and, conversely, make payments.

Choices

There are at least five Apps I can think of that provide relatively easy methods or ways for you to get paid or pay someone for services. But along with those choices, you should consider other factors such as their fraud policies if someone gets into my account and payments are made? Are the procedures for reimbursement the same for these peer-to-peer forms of payments as they are when you use my credit card or bank debit card? Besides their fees, what are their receiving or sending limits, and how fast will you get paid if you choose a particular form of payment? Getting paid in today’s economy is about selecting the best apps to achieve your specific transaction objective. It’s not a one size fits all, or a one app fits all scenario.

Best Options

PayPal: If you want to transfer or receive large sums of money, PayPal should be your app of choice. Currently, the dollar limit for getting paid through PayPal is $60,000.00 per transfer for an unverified identified user. If you are verified, there is no dollar limit. If you want to acquire a costly asset, say like a boat, PayPal provides the best option. PayPal fees are 2.9% plus 30 cents for transfers made in the United States with a credit or debit card, but no fees for transfers are done from your bank account or PayPal balance. Transfers usually take one to three business days, but you can always expedite the transfer by paying an additional 1.5% for an instant transfer.

PayPal options go far beyond just transferring money to others or getting paid. They offer the ability to pay some retailers such as Walmart or Target and offer cashback promotional benefits. Using PayPal to get paid is not lilied to Fiat or what we know as dollars, but the platform allows you t purchase cryptocurrency hold it in your account, and resell it later. In the future, they will be a one-line saving paying 0.4% and maybe a stock trading platform also. The point is that this app provides perhaps the broadest range of services when you are seeking to get paid or make a payment.

Zelle: This form of getting paid, while popular, does provide opportunities for small transfers or payment. Because getting paid via Zelle is impacted by factors such as banking institution, banking history, and account, the limits usually range from $1,000.00 to 3,000.00 dollars. However, if your bank is not a Zelle participant, the limit is only $500.00. What’s great about using Zelle if you are trying to get paid is that transfers are free and instant! Unlike using some of those other apps, you have to wait around one to three days or pay an additional fee to access your money immediately. This method of getting paid or making payments gets rid of wire transfer fees and certified checks for small transactions.

Cash App: This seems to be the most popular choice for getting paid. While popular, it could be costly. The transfer fee is 3% for credit card transactions, but no fee is transferred from your Cash App balance. While the capacity to transfer cash is not $60,000.00 like PayPal, the Cash App transfer limit is ONLY $7,500.00 PER MONTH. These transfers are not instant and can take up to one to three business days to take effect unless you pay an additional instant transfer fee of 1.5%. One of the more exciting features of Cash App is that you can purchase a fractional share of stock or bitcoin to begin your investment. The App will also notify you when your investment spikes or dips and arrange for you to make regular cash investments. One takeaway for choosing and using an App should be the ancillary benefits and not simply transferring money or getting paid. Let’s talk Money Monday on the Zoom Conversation on March 28, 2022, at 7:00 p.m. Sign up at: https://bit.ly/TTCM_Register

WHAT’S UP!

Today’s what’s up is about considering TIPS (Treasury Inflated Protected Securities). Everyone is talking about inflation and its impact on gas prices and food bills. What impact is it having on your investment? It would help if you considered TIPS because your principal increases with inflation and decreases with deflation as measured by the consumer price index. I’m not saying you should do it. I’m just suggesting you look at it as we all figure out ways to combat inflation. And that’s what’s up! Let’s talk Mon-ey Monday fundamentals on the Zoom Conversation on March 28, 2022, at 7:00 p.m. Sign up at: https://bit.ly/TTCM_Register

Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assistant, and CEO of Give2Getrich, LLC. Give2Get Rich, LLC 2022. All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.

Let me begin with a disclaimer: I am not an expert in digital currency. Like most of you, I am still learning and growing in my knowledge. I am very clear that this form of currency is here to stay and will play a major role in finances moving forward. The most famous of digital currency is Bitcoin. But what is Bitcoin and how does it work? Here are two points about this digital currency for your consideration.

Transactional Use

At the moment, Bitcoin is not widely accepted and cannot be used for every form of conducting business. To the extent you can purchase an item using Bitcoin, the process can be convoluted to say the least. Let’s assume you wanted to purchase a computer by MasterCard using Bitcoins. The Bitcoins would have to be converted into digital assets, and then those digital assets would be exchanged for dollars at one of Master Cards crypto currency platforms before the purchase is converted to a MasterCard network. And this is just the process to purchase an item using Bitcoin. Not the simplest of transactions at the moment is it?

If that’s not enough to get your head spinning, you should also note that the Internal Revenue Service (IRS) views digital currency (Bitcoin) as property and therefore it is subject to capital gains. What that simply means is that in order to purchase a new pair of Air Jordan’s, you will have to report the Bitcoin at cost basis (how much you paid for it) and long term (kept for more than one year) or short term (held for less than one year) gains or profits will have to be reported. This make things a bit complicated from a tax perspective at the moment. But the transactional future is bright since in February Tesla announced that it purchased $1.5 Billion worth of Bitcoins driving up the value. Additionally, Tesla announced that they would now accept Bitcoins as payment for their products. More to come about that in the future!

Volatility

Bitcoin has been around an estimated twelve years and involves transactions encrypted by computer codes known as block chain technology which eliminates the need for a central bank or middle man. However, the price is driven by the fact that there is a finite supply available. Between December 2017 and December 2018, Bitcoin fell 83 percent. Contrastingly, during the pandemic sell off in 2020 Bitcoin fell by 49 percent. Furthermore, for two weeks in January 2021 Bitcoin value fell 25 percent. In other words, Bitcoin is speculative and driven mainly by demand, you should know that you can lose your entire principal invested. Which is not to say you should not join the fun, it is simply a matter of how much risk can you absorb? How much can you stand to lose?

Let me be transparent! Like most of you I was curious and have joined the Bitcoin investment movement. I must admit, the investment has been successful thus far in that it has grown to three times the amount of the principal amount invested. But I’m very diligent about not losing my initial investment – no matter what! In the meantime, you can say I’m playing with house money! My own opinion is that some portion of an investment portfolio should constitute cryptocurrency. Take a look. It’s going somewhere!

“What’s Up!” 

I have decided to add a new section to Money Monday’s called “what’s up!” Basically, it is something very important I think you should know that may or may not be unrelated to the main article. Today’s “what’s up!” is if you have large or small credit card balance(s) and want to transfer it to another card there are two bank cards that provide greater or lower interest rates than credit card rewards. Chase Bank has a Chase Slate Visa card which will provide you zero introductory rate on balance transfers for the next fifteen months along with no fees for transfers made within sixty days of opening the account.

Another one is, U.S. Bank Visa Platinum card (www.usbank.com) which has a zero introductory interest rate for both transfers and purchases made for the next 20 months after opening the account. However, there is a transfer fee which is the greater of $5.00 or 3 percent of the amount being transferred. These cards can allow you to transfer debt, and pay it off within the next 15-20 months without additional interest. Go ahead and chop off the head of that snake called compound interest while paying off your debt. That’s what’s up!